Sharechat Logo

Pike River cuts production forecast, shares tumble near month-low

Tuesday 19th October 2010 8 Comments

Text too small?

Pike River Coal, which has just got away its second shipment of coal, has cut its forecast production as delays in underground road development hold up its hydro mining operations. The shares tumbled 7.6% near a month-low $1.09 on the news.

The coal miner expects to produce between 320,000 and 360,000 tonnes of saleable coal in the year to June 2011, according to a statement released by the company today.

The delay comes just over a week after the company announced it was on track to deliver its first 1,000 tonnes of hydro-mined coal and the completion of 790 metres of roadway.

“I think the share price has pretty much said it all, with investors disappointed that they keep getting blindsided by negative announcements,” said Bryon Bourke, head of equities at Craigs Investment Partners.

“Just when we thought it was turning into a boring coal production company, which is like a semi-bond, it seems that they’ve still got significant production risks.”

Chief Executive Peter Whittall said the revision related to slower roadway development and delays with the introduction of the second continuous mining machine and an upgrade to another.

“This will result in a couple of months of previously scheduled high production in May and June slipping into the following financial year,” Whittall said.

Pike River said it expects to reach full hydro system capacity in the June 2011 quarter at a production rate of 60,000 tonnes of coal per month, which will ramp up to 80,000 tonnes per month by the December 2011 quarter.

The company said it is also in the process of evaluating revised funding requirements, including the repayment of the New Zealand Oil & Gas short-term facility due in December.

Discussions are underway with various parties, with further announcements expected during November.

“This remains a great project, the scale of which is as we have always planned,” says Whittall.

“But it hasn’t been without its problems, most recently machinery related. We remain confident, however, about our eventual annual production rates.”

  General Finance Advertising    

Comments from our readers

On 19 October 2010 at 2:38 pm Andre said:
Whats going on here? some good news share price goes up, then bang some real news and down she goes. Someone should investigate this????
On 19 October 2010 at 3:20 pm dave hanan said:
I totally agree with the above. As a shareholder a full and frank disclosure of the problems in developing this mine is requrired. Is the hydro mining (I beleive a first for NZ) suitable for the hard rock encountered. Access to the coal with new roads forged seems also to be an issue.
On 19 October 2010 at 9:50 pm Peter Hendry said:
Hi, is this another S.C.F in the making. Perhaps we should look at the mnagement? This will become a penny share soon. P.S> I will be a buyer at 1c per share. Cheer s Pete
On 20 October 2010 at 9:35 am Silvia Hurley said:
As a shareholder I expect the company to run a business. This has become a science project. I fully agree that someone should investigate this!
On 20 October 2010 at 12:56 pm anitas said:
Well, Well, can't take the heat, can't take the ups and downs, this is a new business and hiccups should be expected. If you don't like it as a shareholder, then get out!!!
On 21 October 2010 at 5:01 am Lofty said:
Reply to "Well, Well". Very smug. Have been a holder bought in and out over 3 years and currently hold a substantial amount. Have relationship with hydro contractors who confirm this is a gold(coal)mine, but PRC has suffered “amateurish” management as we see again here, even as a change at the head, guilty of “but it’s a gold mine and I’ve been appointed” syndrome. No, not a potential penny stock, but big boys need to understand it’s not their bonuses I’m investing in. It’s one thing owning the world’s fastest car, but another entirely driving it. And realising who you’re really going to face at the coal face eventually.
On 21 October 2010 at 3:59 pm murray pearce said:
Coal is a depleting resource so the longer it stays in the ground the greater the value- You do not have to to bright to work that one out .
On 28 October 2010 at 8:28 am Russell said:
Ir would be pleasing if the Pike River Coal board reworked their spread sheets and published expected dividends share holders might expect over th enext 20 years.
Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Daily ShareChat: Pike River Coal
Pike River gains $25m short-term facility from NZOG
Pike River seeks short-term funding
Pike River announces new CEO
Pike River CEO steps down, shares fall
Pike River loss widens ahead of mining
Daily ShareChat: Pike River Coal
MARKET CLOSE: NZ stocks rise; Pike River leads gains
Pike River gets first $10 million away no trouble
Pike River Coal to mine investors for more equity